Cheap International Money Transfers – Forex Payments

Are you looking to a cheap, safe, and secure way to transfer fx abroad? Browse through our guide to compare the best money transfer companies on the market, and learn the ins and outs of the foreign exchange industry.

Please note: The guide deals with international bank to bank forex wires of £/€ /$ 500+. We do no cover topics like travel money, cash pick-ups, or micro-transfers. All companies offer same-day transfers, and have an online platform on their website. All companies offer guidance services by dedicated dealers, with the exception of Transferwise.

Moving Money for Pensions?

Who can use these forex payment providers?

Client Country: All currency firms would happily accept client from the UK, European countries in the Eurozone such as France, Spain, Italy or Germany, West-European clients outside the Eurozone like Sweden, Norway or Switzerland, and clients from Australia or New Zealand.

When it comes to other regions, it’s best to go to their website, insert your details and your requirement, and received an automated email whether the company can handle your request and present you a quote. World First will even give an automated process in the sign up process if the request is outside of its boundaries.

As a rule of a thumb World First and Currencies Direct are the most international on our table of selected money transfer service providers:

Currencies Direct has 20+ local offices across the globe, including regions like UAE and South Africa, and can generally take on middle-eastern clients.

World First has offices in eastern Asia and can take on clients from there, in addition to the majority of other countries.

View Our Special Infographic on the Subject – Click to Enlarge:

Is it a lengthy process to sign up?

Signing up online takes as little as leaving a name, an email, and a phone number. You can specify how would you like to be contacted and when, and the easiest thing to do is to chat things out over the phone.

If you’re from the UK, and you sign up with a company from our list, the sign up will be very easy. These companies are connected to databases that enable them to verify the identity of each UK-based client (or a Brit living abroad) promptly.

In Europe and Australia, things are quite similar. You don’t have to provide excessive documentation to prove your identity, possibly a tad more than a UK-based client would need, but not much more.

In other regions in which a company operates, you must provide some additional evidence in the form of – passport copy, utility bills (in English or notarized translations). Additionally, you would have to provide more information on the purpose of transfer, in order to send money abroad. The process is quite similar to the one you would have if you want to open a bank account.

According to the UK data protection laws, the information you provide cannot be used for any purpose other than recording the transfer and verifying no money laundering is involved. For this very reason, most companies share the exact same requirements it comes to documentation, and they are meticulous in this area, pursuant to the law.

What sort of transfers are available?

The most popular service provided is a SPOT FX contact. Money that is being exchanged immediately into foreign currency. Then, it is sent to its destination (technically, you can send the money to your foreign currency bank account, you don’t have to send it abroad). This service is somewhat similar to the one proposed by banks, only it is cheaper (more on that later on).

What all of the companies are also other types of currency contracts and transfer options that are not available through banks, with the exception of large corporate accounts, or high-net worth individual accounts.

Same-day payments: depending on the destination, and when the money has been received by the company*.

Online transfers: book a trade online, and go through the process without speaking to anyone on the phone.

Phone transfers: to avoid confusion and mistakes, you can make an order via telephone.

List of features offered by all companies on our list, but Transferwise:

Guided transfers: have a certified currency dealer help you tailor the best type of transfer for your needs, receive consultancy on currency trending and when is the right time to initiate the transfer, based on your needs.

Regular transfers / payments: you can automate the transfer process. This is especially useful for things like salary, pension, mortgage payment, and any sort of regular payment that needs to be exchanged into foreign currency and sent overseas.

Forward contracts: this is especially useful for business or individuals who are sending large quantities in instalments, as a hedging tool to protect from fx volatility. The idea is this: you pay a small downpayment of 10% on the money you need to transfer over a period of up to 12 months (or even 24 months with Moneycorp), and in exchange to that, your rate is fixed. That means you would be able to transfer money for today’s exchange rate in the future, regardless of currency fluctuations, up to the amount you paid for.

Limit orders: when someone is not a rush to make a payment, this is one of the best tools in existence. You can decide on your desired rate and transfer is made which the price has been reached. Some firms allow you to decide on a a stop loss, similarly to FX trading brokers.

Face to face meetings: If you are facing a large transfer and want to see how the company operates with your own eyes, you could sing up and schedule a meeting to make acquaintance.

* International currency transfers made with commercial firms wouldn’t be necessarily quicker than the ones in the bank. They could very possibly be quicker, because your request is processed directly by the traders in the trading room, in a company dedicated to this particular service, whereas in banks it goes through a banker which forwards the request, which might end up in a large queue, however – technically, banks and money transfer companies use the same payment systems to send the money to its destination.

It must be taken into consideration that funding the transfer (i.e. sending funds domestically to a segregated account owned by the company) takes time too. So if your one and only consideration is promptness of transfer, you may consider using your bank.

Comparing Costs – Banks / Commercial Forex (FX)

Banks charge too much many for international wire payments. It doesn’t matter where you’re from, with the exception of very specific regions which have unique governmental supervision on banks like Hong Kong. In those cases, you know that send money abroad to a bank account is a costly process.

This is how banks profit from handling international currency transfers:

Fees: There usually a fixed fee for each money transfer, which costs anywhere from £ / $ 15-25.*

Commissions: Some banks (not all) would charge upfront commissions of anywhere between 0.1% to 2%.

Exchange rate markup: They sell and buy currency for 2-4% of what it costs them (i.e. “the interbank rate”).

Hidden fees: Additional fees such as “service fees” may be applied in retro.

To summarize, banks can make as much as $5,000 on a $100,000 transfer, with very little effort or costs on their behalf.

* Though some banks claim for “free international transfers”, this is obviously untrue. We have yet to hear about a bank to waive off all fixed fees, and obviously the most important element in a transfer is the exchange rate spread, which is always wider using high-street banks.

Commercial FX companies, on the other hand, are wholesalers. As smaller, mostly privately owned companies, they have much fewer overheads than banks. They are less greedy, and would be happy to make smaller profits on each transfer of funds abroad.

This is how the fee structure goes.

Fees: Some companies offer a complete no-fee scheme, or waiver fees above transfers of $5,000. Others have very small fixed fees. Few companies which we don’t recommend fees that are as high as what banks charge.

Commission: We have yet to witness any FX company taking any commission.

Exchange rate markup: This will be individual, depending on your needs, the market’s status and of course the volumes you plan on sending. Generally speaking you can get markups as low as 0.5% and less when sending hundreds of thousands abroad, and you won’t be paying anymore than 1.2-1.5% when using most online platforms.

Additional fees: There will be none. Money transfer companies (or the good ones at least) give you a transparent quote upfront.

Thus, in theory, you should be paying around $500 in order to transfer $100,000 abroad. That’s a far more reasonable price for an overseas payment than the one you will pay via bank.

Currency Exchange Online or via Telephone ☎

How does it work, really?

The common and recommended alternative to banks, when discussing foreign currency transfers, is currency brokers. These brokers, whom are mostly operating in the UK (while the largest of the companies accept international clients), are also named Foreign Exchange companies, FX Brokers (not to be confused with FX Trading Brokers which we cover in length on our site), international money transfer firms, and currency providers; All of these synonyms can describe the services these companies provide.

Stage B: Speaking to a representative. Explaining who you are, what to you need to do, and which additional services you might need.

Stage C: Getting a free quote which you are not, I repeat, NOT obliged to take on. You could receive a quote as early as you’re approved in the system, either online (for smaller transfers) or via telephone (this is what most folks prefer). Alternatively, you could ask the dedicated dealer you will be assigned to give you a heads up when prices are more comfortable, and then you could potentially make the trade using lower rates. We shall discuss this topic in length later on.

Stage D: If the quote is to your liking (if you’re interested in shopping for optimal pricing, then this quote must be compared simultaneously to quotes from other companies) – you can give the approval. That means that rate will be locked at this point regardless of further currency shifts, but it is also means you are obliged to make the transfer.

Stage E: You are permitted to transfer the money domestically, in your local currency, to a segregated account. Then the money will be exchanged to the destination currency, and sent internationally to a bank account.

What should you pay attention to when sending money abroad?

What makes an international payment company good, and suitable for your needs?

Regulation: Basically you are looking for the FCA’s registration. The FCA stands for the Financial Conduct Authority, which is the regulative body for financial institutions in the UK. The FCA verifies claims like segregated client accounts are indeed happening in practice. Other regulative bodies in other countries that are a good certificate that verifies it is a legitimate business would be FinCEN approval (USA), and ASIC (Australia). You have to be absolutely sure you are working with a proper company when you’re dealing with large sums of money (or small ones, for that matter).

Knowledge: Your currency dealer should explain to you in detail how the wire transfer would work, which details are required, and show familiarity with the payment system for you to feel safe in getting the money where you wanted it to go in a timely manner. There are small things relating to transfer of funds between countries that will trigger taxation and a good currency dealer knows how to avoid them.

Global reach: you should definitely work with a company that not only accepts clients from your region, but also has local bank accounts, and accepts local debit/credit cards to deposit money (for small transfers). International (non-UK) clients are welcomed to use World which is a company with local presence and infrastructure in many countries, as follows:

What differentiates them from others: longest track record while maintaining spotless reputation, household name in the UK that also does travel money, ATMs, and corporate finance.

What would I choose them for: if I want to know that my money is exchanged at the right moment, I’d explain my situation in detail and allow their currency dealers to make the transaction when they think is optimal.

Since 1996. Serving 150,000 business and personal clients. Great solution for small payments with an advanced online platform accepting $100 and up – Great solution for large transfers with dedicated dealers via telephone.

Area of expertise: Property purchase, repatriation of funds, online merchants.

What differentiates them from others: trading much larger volumes than 90% of the companies on the market. Nice and friendly offices that welcome clients who want face-to-face guidance. 98% satisfaction on feefo. Superb online payment system.

What would I choose them for: online transfers for low amounts, or property transfer via telephone.

With the UK Customer Experience Award you know service is exemplary. With a “Best Rate Guarantee” in the UK, you know you will get the best price.

Area of expertise: All international payments. Either from UK, or anywhere else in the world. They deal with more currencies than almost any company, and in larger volumes than many of the companies combined. Whether you need Japanese Yen or just the Euro, you know you have the cheapest exchange rates in the market with World First.

What differentiates them from others: the entire process is friendly, and the service is extremely hands on. There’s no room for confusion when you sign up, or get a quote. If you have a better quote offered to you, your quote will be easily matched.

What would I choose them for: transfers online or via telephone to any destination in the world for any purpose. You can be rest assured you are getting top Dollar, Pound or Yen in comparison with any other company.

Please note: Figures presented here are estimates based on the writer’s personal experience with money transfer companies. All numbers are indicative at best.

Please note (2): We have a referral agreement with some of the companies mentioned in this guide, which earns us money for each client referred to them. These companies were carefully selected and inspected before inclusion in this guide. TheFXView.com is a reputable known magazine in the area of FX trading, and is particularly known for its honest, straightforward, professional approach, which will be maintained throughout this guide as well.

How do money transfers work?

When you send money abroad, the entire process seems pretty seamless to you, the end-client, but in practice there are sophisticated electronic international payment systems in place to ease the process and save costs. If the old payment systems were in place, and physical payments would have to be made between banks directly or via third-parties, money transfers would have been extremely costly, slow and complicated. The new protocols allow quicker, smoother, and cheaper transactions.

Swift, BACS, t2s, Fedwire, ETFPOS, ToDDaSO, andCHAPS are some of the local and international payment systems in place. Each one of them is different in concept (netting systems, messaging systems, infrastructure systems etc.), and bears different costs, and should be used in different scenarios. The main concept that is in common for all of them: the transfer order is made, and there’s a central clearing system that automatically credits the recipient bank with funds, and collects debts from the sending bank.

Another thing these system have in common is that they’re cheaper when sending higher volumes. That leads us to our next topic.

Safety and Security

One of the reasons people stick to banks is due to the high level of security standards, and the fact a bank is a financial institute that appear as the most “reliable” and “trustworthy”. It has been operating the longest, usually publicly traded, serving hundreds of thousands or millions of clients, and thus – the safest to use?

Right? Wrong!

Banks are indeed very highly secure in terms of technology, but on the other hand, there are a lot of negative aspects towards dealing with banks, and in particular in the domain of Foreign Currency Exchanges. This CNBC piece details some of the recent fines banks have received due to rigging the exchange rates (against their clients’ interests, of course).

When it comes to reputation, longevity, and credibility, a few selected commercial money transfer companies (such as the ones featured on this piece) can definitely fight head to head with banks. MoneyCorp has been operating for 35 years now. It issues public reports detailing everything including everything related to their clientele, revenues and profit margins. It has thousands of mainly positive reviews from people who have used it. The Financial Conduct Authority regulates its activity. Other companies have the same status — when you deal with a currency transfer broker which employees hundreds of employees around the world, trades billions in foreign currency every year, and have been operating for 10, 20 or 30 years, you have absolutely nothing to worry about.

Money Compensation Scheme: Commercial companies don’t have money compensation scheme. On one hand it appears more risky, on the other hand, recovery of fund requirements are rare – it happens when money is sent to the wrong party, etc.

The fact these companies have no compensation scheme allow them to operate on much lower spreads. You lose the banks’ so called advantages, but the bottom line price you are paying is a lot cheaper!

6 thoughts on “Cheap International Money Transfers – Forex Payments”

I was wondering if you could help me please? I’m the Business Development Manager for FC Exchange 1 of the UK’s largest privately owned Foreign Currency Brokers. We operate from the following locations: UK (London and Cornwall) Cyprus (Paphos) and South Africa (Cape Town).

We look to build strategic partnerships with websites like yours so we can be listed as a comparison for international money transfers, Our commercial approach to partnerships is strong and we believe with the long standing relationships we have with our banking syndicate, our prices are the sharpest in the market, as is our willingness to share with this our partners. This translates to some of the highest lead conversion rates in the industry.

Hi, the answer is yes, with the exception of Transferwise which does not enable regular transfers. With other companies you can decide a certain amount will be sent directly to your segregated account, and sent to a certain destination at a certain date everything month. You can either do it at the spot price during that date, or hedge yourself with a Forward contract which will fix your rate on the current rate.

Nice Piece of Information that you have shared!! Also, the way as you compared the money transfer platforms is very good. It helps to peoples that how each platform is different from each other, to which area that platform is associated and which one is best suite to them while they make money transfer. Thanks!!

I identify your all point goes well beyond helping clients finding the most satisfactory and best-adapted Cheap International Money Transfers service to coordinate their needs and also learning the ins and outs of the foreign exchange industry. It’s helpful stuff.